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focused on looking for the small number of genetic abnormalities and variations that are clearly linked to a disease that physicians treat.

InVitae can’t yet run a comprehensive screen of all 1,500 Mendelian disorders, and deliver a report that definitely says whether a patient has one. It has spent its early days establishing a central diagnostics lab, equipped with Illumina sequencing machines, and combing through publicly available scientific literature to find the strongest links between genetic abnormalities and medical disorders. So far, for the small group of beta customers, the test can scan for 150 of those disorders, at a price of $1,500. If a physician wants to ask a narrower question—like whether a patient has one of the many genetic variations that lead to cystic fibrosis—the sequencing service and price can be tailored accordingly, Scott says. The samples get sent in to InVitae’s lab, and a report comes back to the physician a few days later.

While a huge amount of information on these gene-disease links is in the public domain, it’s full of conflicting information, and isn’t curated. Just going through the public literature to try to find the valuable links between genomic abnormality and disease is a daunting task.

“What’s happened historically is kind of a tragedy of the commons,” Scott says. “People put all the variants they study into the public domain, but nobody curates it, cleans it up.” The InVitae team, in doing the curation, has found “enormous errors” that it is weeding out of its central database. The variants in the InVitae database are ones that, Scott says, “accurately predict disease.”

The time is right for such a test, Scott says, because physicians are becoming increasingly interested in not just single-gene or multi-gene diagnostics, but broader genomic tools that can aid in medical diagnosis. Over time, as sequencing gets even cheaper and more scientific links between gene variants and disease are established, InVitae hopes to cast a wider net. In the near future, InVitae hopes to make a single test that scans for all 1,500 known inherited (Mendelian) genetic disorders, and either rules them in or out for an individual patient.

Further in the future—maybe 10 or 20 years, in Scott’s view—newborns will get their full genomes sequenced to look not just for clear inherited disorders, but to delve into predispositions and likelihoods of developing complex diseases that involve multiple genes and environmental factors. Many of these conditions could be spotted early, and managed, long before they start manifesting themselves through mysterious symptoms later in life, Scott says. Disorders like Klinefelter’s syndrome, and hemochromatosis—a common iron-overload condition—can be detected today, but often aren’t, because there’s rarely an obvious reason to look. But InVitae expects that its tests will be able to routinely spot those disorders during its sweeping tests, and those findings could help physicians successfully treat the condition early in life before symptoms cause trouble.

“One of the goals for InVitae is to help manage your genome for life, and do it in a medically oriented way,” Scott says.

Dietrich Stephan, the founder and CEO of SVBio, another aspiring “clinical genomics” entrepreneur, says he’s closely tracking the competition and knows that InVitae has hired a number of experienced people from his previous company, Navigenics. His company is also looking at Mendelian disorders as the first of many genomic diagnostic opportunities.

“I have the highest regard and respect for Randy. I’m looking at it as validating what we’re doing,” Stephan says. “There’s plenty of room in the market for more than one company. Physicians are starved for this.”

The business at InVitae is quite different from Genomic Health, which markets specific diagnostic tests for breast and colon cancer. Those tests must be built on a basis of company-sponsored clinical trials that demonstrate the value of the test for both physicians and payers. By leaning on well-scrubbed, publicly available data from studies of gene variants and rare disorders, InVitae doesn’t need to run lots of expensive clinical trials on its own, Scott says.

The concept for InVitae isn’t actually that new—it was one of the earliest ideas that Scott flirted with back in 2000, in the founding days of Genomic Health. The concept was about what he calls the combination of “Moore’s Law, Metcalfe’s Law, and the law of finite genomes.”

Back then, he saw DNA sequencing tools were on track to get exponentially better, faster and cheaper. The tools would create a flood of DNA data, which isn’t worth much in isolation, but which could be much more valuable when widely shared and compared. The opportunity would someday be within reach, because there are only so many genes and mutations to study that will be really useful for healthcare.

For years, Scott worked on it before concluding that the technology needed to get better. “It was much too early.”

That’s changed now, as instrument makers are racing to develop technology that can sequence entire human genomes for $1,000, in as little as one day. Genomic Health saw the opportunity, invested some in it for a while, but spun it out as the company has other priorities going with specific tests for breast, colon, and prostate cancer.

The market opportunity for something like InVitae could be in the “many billions,” Scott says. Mendelian diseases are one place to start, but even bigger markets could emerge in scouring the genome for cancer. Cambridge, MA-based Foundation Medicine has gotten off to a fast start, and recently attracted an investment from Bill Gates for a genomic test that looks for abnormalities in 200 different cancer-related genes. While Foundation looks for so-called somatic mutations that arise in tumor samples later in life, InVitae envisions looking broadly at the genome for inherited variants that are thought to raise the risk of cancer, Scott says.

How big the various genomic diagnostic markets could be is still anybody’s guess, but Genomic Health alone makes more than $200 million a year, largely off one specific test for breast cancer recurrence. The underlying sequencing technology continues to get faster and cheaper, making it possible for scientists to ask more and more questions that enrich the public databases that InVitae will rely on, and contribute to, as its business grows.

Price, of course, will be a huge factor in determining how widely the tests are adopted, and how well they will be embraced by insurers. InVitae’s service will rise and fall at various points, as technology drives things down, and valuable new features drive things back up, Scott says. Competitors, both publicly declared and stealthy, will also play a role in determining just how high or low the prices will be.

Scott, during a short interview at the JP Morgan Healthcare Conference in San Francisco, seemed to relish all the uncertainty and variables heading his way in the new venture. “We’re really just entering the world, in 2013, where these types of products are coming to market,” he says.